Cuomo proposes $137B state budget, spending 2% more

January 22, 2013

ALBANY - The $137 billion state budget that New York Gov. Andrew Cuomo proposed today would increase spending about 2 percent without tax increases, but New Yorkers would feel some fee hikes.

Cuomo's budget proposal to the Legislature provides 4.4 percent more aid to schools and would fund his proposal to improve instruction, including longer school days and school years. State aid to municipalities outside New York City wouldn't increase at a time when many counties and smaller local governments worry about insolvency amid rising costs and shrinking tax bases.

The budget doesn't include another $6.1 billion that is expected from the federal government for relief from Superstorm Sandy. That would have pushed the total budget to more than $143 billion.

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Gov. Andrew Cuomo(Enterprise file photo)

Cuomo proposes to suspend the driver's licenses of people with big, overdue tax bills. He also would make it harder to plea down some speeding charges to avoid bigger fines and insurance premium hikes - a process he says costs $58 million a year and makes roads unsafe. His measures, however, would include Saturday hours at some Department of Motor Vehicles offices.

The bulk of his new proposals focus on upstate jobs programs and tourism. The budget proposal that details his revenue and spending plan, however, doesn't include mention of the potentially lucrative drilling for natural gas using the contentious process of hydraulic fracturing, or fracking. Cuomo has said he won't indicate if he will support the process that is opposed by environmentalists until a state health study is completed.

"He's funded a number of initiatives in a pretty responsible framework, and spending isn't going up by too much," said Elizabeth Lynam of the independent Citizens Budget Commission.

She said several small fees will touch New Yorkers, including the extension of a utility surcharge paid by ratepayers. The budget also extends a kind of tax on high-income New Yorkers by limiting deductions to charities.

In the budget, Cuomo is putting dollar commitments to the proposals in his Jan. 9 State of the State speech, which was filled with progressive and often costly ideas. After the state passed tough new gun control laws last week, there were questions about how to pay for them. Cuomo proposed $35.9 million to implement key components including registration of assault weapons, re-registering of pistol permits, new databases to keep track of guns, and defensive and safety measures at schools, including at entrances.

The budget he proposed today will go to the Legislature where a series of hearings will be held. Cuomo and legislative leaders then traditionally meet behind closed doors to negotiate a final plan by the April 1 start of the fiscal year.

New York's budget is watched closely nationwide because of its early fiscal year and because it often identifies trends in other states' budget proposals that come out over the next several months.

Cuomo and economic forecasters had expected fiscal times to be better by now after his first two budgets that had to contend with deficits totaling more than $10 billion because of drastically reduced tax revenue during the recession. This year's projected deficit of $1.35 billion is an improvement, but state Comptroller Thomas DiNapoli warns that tax collections continue to remain below the state's latest estimates.

"Tax collections are still not growing at the rate needed to meet year-end projections, and the boost in personal income taxes in December likely won't continue," DiNapoli said.

Cuomo's budget addresses the deficit through a variety of cost-cutting measures and some revenue initiatives.

"So far the budget has been balanced by spending less and taking advantage of one-time windfalls," DiNapoli said. "With the budget process about to begin again, revenue projections should be realistic so that the budget is not balanced with revenues that won't be there."

DiNapoli said the Cuomo administration in November estimated tax growth at 2.9 percent, but it has come in at 1.2 percent. That would mean tax receipts would have to be an unlikely 7.1 percent in the last three months of the fiscal year to meet projections. He said sales tax receipts have also been flat so far this fiscal year.